He sold wotif, now Graeme Wood is putting money into biotech

The flamingo is one of the marvels of the natural world. Born with grey feathers, their diet is the source of the pink pigment that gives them their emblematic colour.

Similarly, for wild salmon, their pink colouring comes from a naturally occurring substance, astaxanthin, thanks to a diet of krill and prawn. Unless fish farms add astaxanthin to the feed, the salmon they produce would be an unappetising grey.

Graeme Wood, the founder of Wotif.com.Credit:Peter Rae

Enter MBD Energy, a biotech outfit, which produces 25 tonnes a year of astaxanthin using its own process, with demand running at six times that from local fish farms which mostly rely on synthetic sources of the product, says managing director Andrew Lawson.

"We are keen to expand that," he says of his astaxanthin production.

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The colouring in blue Smarties comes from microalgae.

MBD Energy has invested $70 million building a company now worth an estimated $150 million, and boasts cornerstone investors such as Anglo American, The Sentient Group and Graeme Wood, the wotif.com.au founder.

It is one of the few local successes of a biotech start-up based on algae which, after 10 years of work, has now reached commercial operations.

Keen to tap algae as a sustainable feedstock for manufacturing, the NSW government is giving $1 million to UTS to establish an algae hub. Fintech may be one of the sexy new sectors for innovation hubs, but manufacturing processes that do not rely on petrochemicals are essential in an increasingly carbon-constrained world.

UTS is finalising a $9 million investment to develop a facility at the university to produce algal products, Professor Peter Ralph said. The algae hub is intended to introduce business to the possibilities of using algae in manufacturing, while also serving to reduce carbon emissions.

Algae may be dangerous in river systems but can be farmed for profit.Credit:Colleen Petch

Algae are microbes that can be used in everything from cosmetics and nutraceuticals through to developing therapeutic drugs. They already have a range of roles in the pigment industry. For example, the colour blue in Smarties comes from microalgae, he says.

Algal blooms may be deadly for fish in river systems, but grown in a controlled manner on ponds, for example, it can be profitable, Professor Ralph said.

"Algae can be grown and harvested by a farmer, just like they grow and harvest wheat or rice," he said. And there were other areas where the economics were beginning to shift in favour of using algae, he said.

"Omega-3 is generally produced as a fish byproduct. But if we use the algae, the original source material, at scale, then it would be cost-competitive."

Dubbed the "Deep Green Biotech Hub", the UTS push follows on from the recent launch of the Centre for Industrialised Algae as the university seeks to kick-start biomanufacturing. It has a range of initiatives under way, such as a partnership with global giant GE Healthcare to develop production equipment and laboratories able to produce pharmaceutical industry-grade algal product.

The hub is aimed at establishing an incubator environment to develop algae as a cost-effective and sustainable resource for a range of industries from nutritional supplements, cosmetics, industrial chemicals and animal feed, Professor Ralph said.